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How profitable is selling your customer base? | but what about non-identifying information like emails or even telephone numbers? Are you allowed to do this? Most countries have privacy laws that would explicitly forbid companies from selling data not just to other companies, but even to other divisions within the company without explicit approval from customer. There are adequate regulatory controls that would stop companies from indulging in such practises. However tons of smaller / un-registered companies or companies operating from certain countries are definitely a source for such practises. |
How to find out the amount of preferred stock of Coca Cola Company? | They were issued in 1919 and eliminated in 1926. This means that Coca-Cola redeemed them in 1926 and either converted the preferred's to common stock or paid the preferred investor's back their full par value and took them off the books. |
UK Ltd taxation on stocks/bonds income and real estate rent income | For stocks, bonds, ETF funds and so on - Taxed only on realised gain and losses are deductible from the gain and not from company's income. Corporate tax is calculated only after all expenses have been deducted. Not the other way around. Real estate expenses can be deducted because of repairs and maintenance. In general all expenses related to the operation of the business can be deducted. But you cannot use expenses as willy nilly, as you assume. You cannot deduct your subscription to Playboy as an expense. Doing it is illegal and if caught, the tours to church will increase exponentially. VAT is only paid if you claim VAT on your invoices. Your situation seems quite complicated. I would suggest, get an accountant pronto. There are nuances in your situation, which an accountant only can understand and help. |
TOCOM oil in USD | TOCOM Crude is a cash-settled blend of Oman and Dubai crude oil, both quoted in USD. The daily settlement price is mark to market, but the final settlement price is based on reported prices from Dubai and Oman (or calculated in some cases with a known procedure), averaged and then converted to Yen using monthly average exchange rates as published by a reference bank (see Detailed Rules) You're trying to go all the way back and unfuddle quotes into a blend of USD-quoted oils. The correct procedure here would be to go with the Oman and Dubai prices in the first place (unless you're trying to arbitrage the TOCOM market). As to why they do it this way? It's a service. TOCOM takes on all the challenges to provide customers with a steady and consistent way of trading cash-oil. For physical oil, all you'd have to do is buy the blend on Dubai's and Oman's spot market. You trust TOCOM's price finding process, i.e. there will be no discrepancies between your TOCOM cash-oil and the Middle East physical oil. Edit: As to why Japan isn't buying WTI directly: There's a considerable cost of carry. WTI delivery location is Cushing, OK; there are pipelines but it's still a logistics act to get the oil to a port on the West Coast and then have it shipped to Japan. Dubai's delivery is at Jebel Ali (Persian Gulf), Omani crude can be shipped straight from Mina Al Fahal. Not only is it a shorter trip but also there are more shipping companies specialised in oil deliveries to the Asian hotspots. Why they pay in USD? Persian oil is highly sought after in nearly all of Asia's economies but there's little other exported goods from there. So naturally the market for currency crosses (AEDJPY, OMRJPY, AEDINR, OMRINR, etc.) is not that liquid. At least not as liquid as to make buying Persian oil a smooth deal. Anyway, both Dubai and Oman chose to follow Western practice to quote their contracts in USD and (maybe because of liquidity concerns) also to accept USD for payment only. |
First time home buyer. How to negotiate price? | First of all, never ask a realtor for advice. The realtor represents the SELLER. Blankip's advice above is by far the most accurate of the previous answers. The first step is to estimate the market. Look at past sales in the neighborhood over time, and from them estimate the prospects for the house at different time durations. Based on other sales, how fast do you think the house will sell at a given price? 60 days, 90 days, a year? If a house is high priced, that means the seller is prepared to wait. He is saying "I am happy to wait a year to find somebody who will pay this." Next, who is the owner? Young professional? Retiring couple? Landlord? Flipper? Who is it? The more you know about the owner, the better. Everybody has a time table, you need to find out what that is. Next, what is YOUR timetable? You need the house by the end of the month, or by the end of the year, or never, which is it? Objectively rate the house. Plusses and minuses. Good houses are those which everybody else hates and you love. You will get the best price there. (Assuming you need to find a house in 90 days) Based on these considerations determine the lowest price you think the owner will accept in a 30-day time frame. Make a written offer with an address and email, no phone number. If he comes back with a counter offer, ignore it. If for some reason a realtor has your number and calls you, tell them "My written offer speaks for itself. I have nothing further to say." It is very important not to entertain haggling or counter offers. Don't even pick up the phone. He has your WRITTEN offer. He can email or write you: I accept. If the 30-days elapse, move onto your #2 choice and make a more aggressive offer. If that doesn't work, go to choice #3 and accept the listed price. This strategy may seem counter-intuitive because the natural tendency for people is to want to communicate. Trust me: the way to succeed in a negotiation is to NOT communicate. Make your offer and that is that. That is the pro way to do it, and will produce the best result for a short-term situtation. Long term situation If you are an investor ("flipper"), or have a lot of time to wait/spend, you can use a different strategy which involves pressuring the seller. What you do here is find a property you want in which the owner is vulnerable. That means someone who is old, bankrupt, out of work, indicted and on their way to prison or already in prison, etc. Bank owned properties fall into this category. In this case you figure out the 6-month price or however long you are willing to work on it. Then you pester the person. Become their buddy. Visit them in prison. Take the bank officer to lunch. Show up on holidays. Invite them to Thanksgiving. Start a relationship. Every two weeks you pester them. Want to sell yet? Want to sell yet? You basically harass them until they capitulate. Maybe it takes 6 months. Maybe it takes 2 years. Eventually they will give in. By this means you can get a much better deal than in strategy 1 above, but it takes a lot more time and effort and is appropriate more for an investor. |
How will going from 75% Credit Utilization to 0% Credit Utilization affect my credit score? | I wrote an article about FICO scoring which shows that 30% of your score is based on utilization or amount owed. I can't say exactly how much your score will rise, or how long it will take, but your score will improve dramatically from what you propose. This chart is from Credit Karma, and it shows how zero utilization is actually bad when it comes to your score. I wrote an article on my blog titled Too Little Debt in which I discuss further. Under 20% is ideal, just not zero. |
In a house with shared ownership, if one person moves out and the other assumes mortgage, how do we determine who owns what share in the end? | The ownership of the house depends on what the original deed transferring title at the time of purchase says and how this ownership is listed in government records where the title transfer deed is registered. Hopefully the two records are consistent. In legal systems that descended from British common law (including the US), the two most common forms of ownership are tenancy in common meaning that, unless otherwise specified in the title deed, each of the owners has an equal share in the entire property, and can sell or bequeath his/her share without requiring the approval of the others, and joint tenancy with right of survivorship meaning that all owners have equal share, and if one owner dies, the survivors form a new JTWROS. Spouses generally own property, especially the home, in a special kind of JTWROS called tenancy by the entirety. On the other hand, the rule is that unless explicitly specified otherwise, tenancy in common with equal shares is how the owners hold the property. Other countries may have different default assumptions, and/or have multiple other forms of ownership (see e.g. here for the intricate rules applicable in India). Mortgages are a different issue. Most mortgages state that the mortgagees are jointly and severally liable for the mortgage payments meaning that the mortgage holder does not care who makes the payment but only that the mortgage payment is made in full. If one owner refuses to pay his share, the others cannot send in their shares of the mortgage payment due and tell the bank to sue the recalcitrant co-owner for his share of the payment: everybody is liable (and can be sued) for the unpaid amount, and if the bank forecloses, everybody's share in the property is seized, not just the share owned by the recalcitrant person. It is, of course, possible to for different co-owners to have separate mortgages for their individual shares, but the legalities (including questions such as whose lien is primary and whose secondary) are complicated. With regard to who paid what over the years of ownership, it does not matter as far as the ownership is concerned. If it is a tenancy in common with equal shares, the fact that the various owners paid the bills (mortgage payments, property taxes, repairs and maintenance) in unequal amounts does not change the ownership of the property unless a new deed is recorded with the new percentages. Now, the co-owners may decide among themselves as a matter of fairness that any money realized from a sale of the property should be divided up in accordance with the proportion that each contributed during the ownership, but that is a different issue. If I were a buyer of property titled as tenancy in common, I (or the bank who is lending me money to make the purchase) would issue separate checks to each co-seller in proportion to the percentages listed on the deed of ownership, and let them worry about whether they should transfer money among themselves to make it equitable. (Careful here! Gift taxes might well be due if large sums of money change hands). |
If a bank has a transfer limit, what happens if another bank pushes/pulls more than that? | Or at least I saw it do so with Bank of America. |
How do I factor dividends and yield into the performance of a security? | Good observation. In fact, the S&P index itself is guilty of not including dividends. So when you look at the index alone, the delta between any two points in time diverges, and the 20 return observed if one fails to include dividends is meaningless, in my my humble opinion. Yahoo finance will let you look at a stock ticker and offer you an "adjusted close" to include the dividend effect. |
Why would you ever turn down a raise in salary? | I would turn down a 20% raise in salary without thinking, if they would offer that I can have a 4 day work week. I even take a 10% cut for this! |
How does one's personal credit history affect one's own company's credit rating? | For a newly registered business, you'll be using your "personal" credit score to get the credit. You will need to sign for the credit card personally so that if your business goes under, they still get paid. Your idea of opening a business card to increase your credit score is not a sound one. Business plastic might not show up on your personal credit history. While some issuers report business accounts on a consumer's personal credit history, others don't. This cuts both ways. Some entrepreneurs want business cards on their personal reports, believing those nice high limits and good payment histories will boost their scores. Other small business owners, especially those who keep high running balances, know that including that credit line could potentially lower their personal credit scores even if they pay off the cards in full every month. There is one instance in which the card will show up on your personal credit history: if you go into default. You're not entitled to a positive mark, "but if you get a negative mark, it will go on your personal report," Frank says. And some further information related to evaluating a business for a credit card: If an issuer is evaluating you for a business card, the company should be asking about your business, says Frank. In addition, there "should be something on the application that indicates it's for business use," he says. Bottom line: If it's a business card, expect that the issuer will want at least some information pertaining to your business. There is additional underwriting for small business cards, says Alfonso. In addition to personal salary and credit scores, business owners "can share financials with us, and we evaluate the entire business financial background in order to give them larger lines," she says. Anticipate that the issuer will check your personal credit, too. "The vast majority of business cards are based on a personal credit score," says Frank. In addition, many issuers ask entrepreneurs to personally guarantee the accounts. That means even if the businesses go bust, the owners promise to repay the debts. Source |
Supply & Demand - How Price Changes, Buy Orders vs Sell Orders [duplicate] | For every buyer there is a seller. That rule refers to actual (historical) trades. It doesn't apply to "wannabees." Suppose there are buyers for 2,000 shares and sellers for only 1,000 at a given price, P. Some of those buyers will raise their "bid" (the indication of the price they are willing to pay) above P so that the sellers of the 1000 shares will fill their orders first ("sold to the highest bidder"). The ones that don't do this will (probably) not get their orders filled. Suppose there are more sellers than buyers. Then some sellers will lower their "offer" price to attract buyers (and some sellers probably won't). At a low enough price, there will likely be a "match" between the total number of shares on sale, and shares on purchase orders. |
Alternative to Jumbo Mortgage | Yes, banks still offer combo loans, but it is going to depend on the appraised value of your home. Typically lenders will allow you to finance up to 80% loan to value on the first mortgage (conforming loan amount) and 95% combined loan to value on a HELOC. I would start by checking with your local credit union or bank branch. They have more competitive rates and can be more flexible with loan amount and appraised value guidelines. |
Legitimate unclaimed property that doesn't appear in any state directory? | It's true that most states have limits on what finders can charge if the listing is in state possession. If it is in the pre-escheat phase (that period of time before it goes to the state) then even if the money will eventually go to the state, the limits don't apply. Keane does a lot of work with transfer agents that handle the administrative work of stocks. Other options that have a time limit include I have a friend that was contacted by Keane. It turned out to be stock that her mother had when she worked for AMEX. She got busy with other things and got another letter from Keane. The stock increased in value and they wanted more money to help her even though they had already done the work of finding her. The money eventually went to the state and she was able to claim the full amount for FREE. If the suggestions I gave you don't get results, contact me through my web site and I'll try to help. Good luck! |
Opening offshore account from UK | I think your best bet here would be HSBC. They will provide the required currencies, credit/debit cards, and very easy to use online banking transfers. This includes an online "Global Account View" which features all of your accounts on a single screen and allows you to "drag and drop" money between accounts. Regarding fees, I suspect you will need to be a "Premier Account" holder in order to avoid any fees imposed on transactions such as money transfers and exchanging money between currencies. In my experience HSBC offers extremely good exchange rates when exchanging "large" amounts of money ( greater than $10,000 / GBP 5,000 ). Exchanging small amounts will carry a larger spread but still much better than most banks offer. In my experience, exchanging GBP 5000 will have a spread of about 0.50-to-0.75 percent, while exchanging more than GBP10,000 will have a spread of as little as 0.10-to-0.20 percent. In order to qualify for a "Premier Account", if my memory of HSBC UK serves me correctly, you will need to have at least GBP 50,000 net across all of your HSBC managed accounts, including stockbroking and other investment accounts. In order to open a banking Swiss account, you will need to travel to Switzerland and apply in person. You cannot open a foreign bank account remotely. With a foreign investment account, I believe you can open accounts remotely. For example, I opened an account with Fidelity Switzerland using my Fidelity UK account directly from the UK, however obviously Fidelity does not provide banking services so this is not of interest to you. The simplest thing to do is to visit your local HSBC branch and discuss it with them in person. Other UK banks, such as Barclays, will also provide such services, but in my experience they are not as competitive on fees. |
Allocation between 401K/retirement accounts and taxable investments, as a young adult? | First off, great job on your finances so far. You are off on the right foot and have some sense of planning for the future. Also, it is a great question. First, I agree with @littleadv. Take advantage of your employer match. Do not drop your 401(k) contributions below that. Also, good job on putting your contributions into the Roth account. Second, I would ask: Are you out of debt? If not, put all your extra income towards paying off debt, and then you can work your plan. Third, time to do some math. What will your business look like? How much capital would you need to get started? Are there things you can do now on a part-time basis to start this business or prepare you to start the business? Come up with a figure, find some mutual funds that have a low beta, and back out how much money you need to save per month, so you have around that total. Then you have a figure. e.g. Assume you need $20,000, and you find a fund that has done 8% over the past 20 years. Then, you would need to save about $110/month to be ready to go in 10 years, or $273/month to go in about 5 years. (It's a time value of money calculation.) The house is really a long way off, but you could do the same kind of calculation. I feel that you think your income, and possibly locale, will change dramatically over the next few years. It might not be bad to double what you are saving for the business, and designate one half for the house. |
Should I take a personal loan for my postgraduate studies? | If you are eligible for FEE-HELP then this is by far the cheapest way of financing higher education in Australia. |
How can I judge loan availability? | It sounds like your current loan is in your name. As such, you are responsible for paying it. Not your family, you. It also sounds like the loan payments are regularly late. That'll likely drastically affect your credit rating. Given what you've said, it doesn't surprise me that you were declined for a credit card. With the information on your credit report, you are a poor risk. Assuming your family is unable to pay loan on time (and assuming you aren't willing to do so), you desperately need to get your name off the loan. This may mean selling the property and closing out the loan. This won't be enough to fix your credit, though. All that will do is stop making your credit worse. It'll take a few years (five years in Canada, not sure how many years in India) until this loan stops showing up on your credit report. That's why it is important to do this immediately. Now, can a bank give you a loan or a credit card despite bad credit? Yes, absolutely. It all depends on how bad your credit is. If the bank is willing to do so, they'll most likely charge a higher interest rate. But the bank may well decide not to give you a loan. After all, your credit report shows you don't make your loan payments on time. You may also want to request your own copy of your credit report. You may have to pay for this, especially if you want to see your score. This could be valuable information if you are looking to fix your finances, and may be worth the cost. If you are sure it's just this one loan, it may not be necessary. Good luck! Edit: In India CIBIL is the authority that maintains records. Getting to know you exact score will help. CIBIL offers it via TransUnion. The non-payment will keep appearing on your record for 3 years. As you don't have any loans, get a credit card from a Bank where you have Fixed Deposits / PPF Account as it would be easier to get one. It can then help you build the credit. |
Why does the biotechnology industry have such a high PE ratio? | Residential Construction at 362x, by the way. I'm going to hazard a guess here - Say XYZ corp trades at $100, and it's showing a normal earnings of $10 the last few years. Its industry falls on hard times, and while it makes enough to keep its doors open, profits fall to $1. The company itself is still sound, but the small earnings result in a high P/E. By the way, its book value is $110, and they have huge cash on the books along with real estate. I offer these details to show why the price doesn't drop like a rock. Now, biotech may be in a period of low reported earnings but with future results expected to justify the price. On one hand it may be an anomaly, with earnings due to rise, or it may be a bit of a bubble. An analyst for this sector should be able to comment if I'm on the right track. |
Specifically when do options expire? | Here is the answer from my brokerage: Regular equity monthly options expire on the 3rd Friday of every month. The last time to trade them is by market close at 4 PM Eastern time. The weekly options will expire on the Friday of that week, also with a last trading time of 4 PM Eastern time. Options that expire in the money by .01 or more are automatically exercised. If you are long an option that is out of the money at expiration, it will expire worthless. If you are short an option, even if it expires out of the money, you are still at risk for possible assignment since the long option holder always has the right to exercise an option prior to expiration.* |
Should I pay off my credit card online immediately or wait for the bill? | If you carried a balance from the last month, then pay the card off as soon as possible. Otherwise I agree with @mbhunter that you should wait until close to time for the bill to become due. Then always pay the credit card off in full and you will borrowing Chase's money interest free for up to 30 days. |
How do you report S-corporation Shareholder loans / capital contributions? | As the owner of the S-corp, it is far easier for you to move money in/out of the company as contributions and distributions rather than making loans to the company. Loans require interest payments, 1099-INT forms, and have tax consequences, whereas the distributions don't need to be reported because you pay taxes on net profits regardless of whether the money was distributed. If you were paid interest, disregard this answer. I don't know if or how you could re-categorize the loan once there's a 1099-INT involved. If no interest was ever paid, you just need to account for it properly: If the company didn't pay you any interest and never issued you a 1099-INT form (i.e. you wrote a check to the company, no promissory note, no tax forms, no payments, no interest, etc.) then you can categorize that money as a capital contribution. You can likewise take that money back out of the company as a capital distribution and neither of these events are taxable nor do they need to be reported to the IRS. In Quickbooks, create the following Equity accounts -- one for each shareholder making capital contributions and distributions: When putting money into the company, deposit into your corporate bank account and use the Capital Contribution equity account. When taking money out of the company, write yourself a check and use the Distributions account. At the end of every tax year, you can close out your Contributions and Distributions to Retained Earnings by making a general journal entry. For example, debit retained earnings and credit distributions on Dec 31 every year to zero-out the distributions account. For contributions, do the reverse and credit retained earnings. There are other ways of recording these transactions -- for example I think some people just use a Member Capital equity account instead of separate accounts for contributions and distributions -- and QB might warn you about posting journal entries to the special Retained Earnings account at the end of the year. In any case, this is how my CPA set up my books and it's been working well enough for many years. Still, never a bad idea to get a second opinion from your CPA. Be sure to pay yourself a reasonable salary, you can't get out of payroll taxes and just distribute profits -- that's a big red flag that can trigger an audit. If you're simply distributing back the money you already put into the company, that should be fine. |
Car Loan upside down--refinance before selling? | As for refinancing: Many institutions charge up-front fees when doing any type of vehicle loan. Typically this is in the neighborhood of 1% the value of the loan, with a floor of $100 (although this may vary by lender). However, for the loan the be secured by the vehicle, the principle value must be less than the collateral value. In your case, this means there is a collateral shortfall of $4,000. When working with a traditional bank, you would have two options: pay the difference up front (reducing the principle value of the loan), or obtaining a separate loan for the difference. This separate loan would often have a higher interest rate unless you have some other form of collateral to secure it with. I doubt CarMax would do a separate loan. All that being said, if you plan on selling the vehicle within the next twelves months, don't bother refinancing. It won't be worth the hassle. |
Should I always hold short term bonds till maturity? | Risk is reduced but isn't zero The default risk is still there, the issuer can go bankrupt, and you can still loose all or some of your money if restructuring happens. If the bond has a callable option, the issuer can retire them if conditions are favourable for the issuer, you can still loose some of your investment. Callable schedule should be in the bond issuer's prospectus while issuing the bond. If the issuer is in a different country, that brings along a lot of headaches of recovering your money if something goes bad i.e. forex rates can go up and down. YTM, when the bond was bought was greater than risk free rate(govt deposit rates) Has to be greater than the risk free rate, because of the extra risk you are taking. Reinvestment risk is less because of the short term involved(I am assuming 2-3 years at max), but you should also look at the coupon rate of your bond, if it isn't a zero-coupon bond, and how you invest that. would it be ideal to hold the bond till maturity irrespective of price change It always depends on the current conditions. You cannot be sure that everything is fine, so it pays to be vigilant. Check the health of the issuer, any adverse circumstances, and the overall economy as a whole. As you intend to hold till maturity you should be more concerned about the serviceability of the bond by the issuer on maturity and till then. |
Why is Net Asset Value (NAV) only reported by funds, but not stocks? | Nobody tracks a single company's net assets on a daily basis, and stock prices are almost never derived directly from their assets (otherwise there would be no concept of 'growth stocks'). Stocks trade on the presumed current value of future positive cash flow, not on the value of their assets alone. Funds are totally different. They own nothing but stocks and are valued on the basis on the value of those stocks. (Commodity funds and closed funds muddy the picture somewhat, but basically a fund's only business is owning very liquid assets, not using their assets to produce wealth the way companies do.) A fund has no meaning other than the direct value of its assets. Even companies which own and exploit large assets, like resource companies, are far more complicated than funds: e.g. gold mining or oil extracting companies derive most of their value from their physical holdings, but those holdings value depends on the moving price and assumed future price of the commodity and also on the operations (efficiency of extraction etc.) Still different from a fund which only owns very liquid assets. |
Prepaying a loan: Shouldn't the interest be recalculated like a shorter loan? | When you pay off a loan early, you pay the remaining principal, and you save all of the remaining interest. So you do save on interest, but it's the interest you would have paid in the future, not the interest you have paid in the past. (Your remaining balance when you pay off the loan only includes the principal, not the projected interest.) Interest is a factor of the amount borrowed, the interest rate and the amount of time you borrow the money. The sooner you repay the money, the less interest you pay. Imagine if you had taken a 30 year loan at 4% interest but were allowed to make no payments until the loan term ended. If you waited 15 years to make your first payment, you wouldn't owe the same money as if you'd made payments every month. No, instead of owing ~$64k, you'd owe ~$182k, because you had borrowed $100k for 15 years (plus the interest due) rather than borrowing a declining sum. So that's why you don't get a refund on interest for previous months. If you had started with a 16 year loan, then you would have been paying more principal every month, and your monthly amount due would have been higher to reflect that. As you paid the principal off faster, the interest each month would drop faster. Paying a huge portion of the principal at the end of the loan is not the same as steadily paying it down in the same time frame. You will pay a lot more interest in the former case, and rightfully so. It might help to consider a credit card payment in comparison. If you run up a balance and pay only the minimum each month, you pay a lot of interest over time, because your principal goes down slowly. If you suddenly pay off your credit card, you don't have to pay any more interest, but you also don't get any interest back for previous months. That's because the interest accrued each month is based on your current balance, just like your mortgage. The minimum payments are calculated differently, but the interest accrued each month uses essentially the same mechanism. |
Are Index Funds really as good as “experts” claim? | A lot of it boils down to these key points: |
The Benefits/Disadvantages of using a credit card | paying it off over time, which I know is the point of the card That may very well be the card issuer's goal, but it need not be yours. The benefits, as your question title seems to ask for - That said, use the card, but don't spend more than you have in your checking account to pay it when the bill comes. What you may want to hear - "Charge the furniture. Pay it off over the next year, even at 20%/yr, the total interest on $2000 of furniture will only be $200, if you account for the declining balance. That's $4/week for a year of enjoying the furniture." You see, you can talk yourself into a bad decision. Instead, shop, but don't buy. Lay out the plan to buy each piece as you save up for it. Consider what would happen if you buy it all on the card and then have any unexpected expenses. It just gets piled on top of that and you're down a slippery slope. |
Is there any online personal finance software without online banking? | SavingsMap is a web-based personal finance forecasting tool that requires no bank account or personal information other than an email address. As founder of SavingsMap, our goal is to forecast future cash flows based on your current budget, while using strategies to minimize US tax obligations and taking into account expected major life events. |
What is KIRCHSTRASSE on my statement bill? | POS stands for Point of Sale (like a specific store location) which indicates that the purchase occurred by using your debit card, but it can also be the on-line transaction done via 3-D Secure. Checking with bank, they said that Kirchstrasse transaction could be related to direct marketing subscription service ordered on-line. Investigating further what I've found these kind of transactions are performed by 2BuySafe company registered at Kirchstrasse in Liechtenstein with went through the MultiCards on-line cashier which can be used for paying different variety of services (e.g. in this case it was polish on-line storage service called Chomikuj). These kind of transactions can be tracked by checking the e-mail (e.g. in gmail by the following query: after:2014/09/02 before:2014/09/02 Order). Remember, that if you still don't recognise your transaction, you should call your bank. I have found also some other people concerns about that kind of transactions who ask: Is 2BuySafe.com and www.multicards.com some sort of Scam? Provided answer says: MultiCards Internet Billing is a provider of online credit card and debit card processing and payment solutions to many retailers worldwide. MultiCards was one of the pioneer companies offering this type of service since 1995 and is a PCI / DSS certified Internet Payment Service Provider (IPSP) providing service to hundreds of retail websites worldwide MultiCards is a registered Internet Payment Service Provider and has implemented various fraud protection tools including, but not limited to, MultiCards Fraud Score Tool and 'Verified by Visa' and 'MasterCard SecureCode' to protect card holder's card details. 2BuySafe.com Is also Secured and Verified By GeoTrust The certificate should be trusted by all major web browsers (all the correct intermediate certificates are installed). The certificate was issued by GeoTrust. Entering Incorrect information can lead to a card being rejected as @ TOS 2BuySafe.com is hosted on the Multicards Server site |
How can I withdraw money from my LLC? | There are TWO parts to an LLC or any company structure. This being the entire point of creating an LLC. The context is that a lawyer is after your LLC, and he's arguing that the LLC is not genuine, so he can go after your personal assets - your house, car, IRAs, tap your wife's salary etc. This is called "piercing the corporate veil". What would he use to claim the LLC is not genuine? The determination here is between you and the judge in a lawsuit. Suffice it to say, the way you withdraw money must consider the above issues, or you risk breaking the liability shield and becoming personally liable, which means you've been wasting the $25 every year to keep it registered. The IRS has a word for single member LLCs: "Disregarded entity". The IRS wants to know that the entity exists and it's connected to you. But for reporting tax numbers, they simply want the LLC's numbers folded into your personal numbers, because you are the same entity for tax purposes. The determination here is made by you. *LLCs are incredible versatile structures, and you can actually choose to have it taxed like a corporation where it is a separate "person" which files its own tax return. * The IRS doesn't care how you move money from the LLC to yourself, since it's all the same to them. The upshot is that while your own lawyer prohibits you from thinking of the assets as "all one big pile", IRS requires you to. Yes, it's enough to give you whiplash. |
How to get started with savings, paying off debt, and retirement? | You have a small emergency fund. Good! Be open about your finances with each other. No secrets, except around gift-giving holidays. Pay off the debts ASAP. Don't accumulate more consumer debt after it's paid off. I wouldn't contribute anything more to the 401k beyond what gives you a maximum match. Free money is free money, but there are lots of strings attached to tax-advantaged accounts. Be sure you understand what you're investing in. If your only option is an annuity for the 401k, learn what that is. Retire into something. Don't just retire from something. (Put another way: Don't retire.) Don't wait until you're old to figure out what you want to retire into. Save like crazy before you have kids. It's much harder afterwards. |
Why would a bank take a lower all cash offer versus a higher offer via conventional lending? | Also keep in mind that with an all-cash offer, they get their money now and not spread over X-many years, which means they can reinvest it now rather than piece meal across the term of whatever the loan would be. (Presuming the bank would be financing the house themselves.) Additionally, with an all-cash offer, there end to be fewer lawyers at the table, fewer parties total, so the process can generally proceed faster. |
Is keeping track of your money and having a budget the same thing? | A budget is a predetermined plan for spending allocated funds to a fixed set of categories according to a schedule. If by, "Keeping track of your money" you mean you are only recording your spending to see on what it is being spent and when, then the answer is no. A budget has constraints on three things: Schedule: The mortgage has to be paid at the 1st of the month with a 2 day grace period. Amount: The mortgage payment is 1500.00 Category: The mortgage. Tracking your money would be as follows: 10/5/2016: $25 for a video game. 10/5/2016: $129.99 for two automobile tires. 10/6/2016: $35.25 for luncheon. I didn't like him! Why did I blow this money? 10/7/2016: nothing spent...yoohoo! 10/8/2016: Payday, heck yeah! I'm financially solvent YET AGAIN! How do I do it?! See the difference? |
Why do stock or commodity prices sometimes rise suddenly just before market close? | This is often the case where traders are closing out short positions they don't want to hold overnight, for a variety of reasons that matter to them. Most frequently, this is from day traders or high-frequency traders settling their accounts before the markets close. |
Accounting for reimbursements that exceed actual expenses | I've been in a very similar situation to yours in the past. Since the company is reimbursing you at a flat rate (I assume you don't need to provide documentation/receipts in order to be paid the per diem), it's not directly connected to the $90 in expenses that you mention. Unless they were taking taxes out that would need to be reimbursed, the separate category for Assets:Reimbursable:Gotham City serves no real purpose, other than to categorize the expenses. Since there is no direct relationship between your expenses and the reimbursement, I would list them as completely separate transactions: Later, if you needed to locate all of the associated expenses with the Gotham trip, gnucash lets you search on memo text for "Gotham" and will display all of the related transactions. This is a lot cleaner than having to determine what piece of the per diem goes to which expenses, or having to create a new Asset account every time you go on a trip. |
Unemployment Insurance Through Options | Options do act, somewhat, like insurance.... However.... An insurance policy will not have such short term expiration time frames. A 20 year term life insurance policy can be thought of as insurance with an expiration. But the expiration on options is in weeks, not decades. So (IMO) options make terrible insurance policies because of the very short term expirations they have. |
Why do put option prices go higher when the underlying stock tanks (drops)? | Options pricing is based on the gap between strike and the current market, and volatility. That's why the VIX, a commonly accepted volatility index, is actually just a weighted blend of S&P 500 future options prices. A general rise in the price of options indicates people don't know whether it will go up or down next, and are therefore less willing to take that risk. But your question is why everything underwater in the puts chain went higher, and that's simple: now that Apple's down, the probability of falling a few more points is higher. Especially since Apple has gone through some recent rough times, and stocks in general are seen as risky these days. |
What's the difference between Market Cap and NAV? | Market caps is just the share price, multiplied by the number of shares. It doesn't represent any value (if people decide to pay more or less for the shares, the market cap goes up or down). It does represent what people think the company is worth. NAV sounds very much like book value. It basically says "how much cash would we end up with if we sold everything the company owns, paid back all the debt, and closed down the business? " Since closing down the business is rarely a good idea, this underestimates the value of the business enormously. Take a hairdresser who owns nothing but a pair of scissors, but has a huge number of repeat customers, charges $200 for a haircut, and makes tons of money every year. The business has a huge value, but NAV = price of one pair of used scissors. |
What is an effective way to invest in electric car industry? | At this time I would say that the electric car industry as a whole is too new to be able to invest in it as a sector. There are only a handful of companies that focus solely on electric cars to create a moderately diverse portfolio, let alone a mutual fund. You can invest in mutual funds that include EV stocks as part of an auto sector or clean energy play, for example, but there's just not enough for an EV-only fund at this point. At this point, perhaps the best you can do if you want an exclusively EV portfolio is add some exposure to the companies that are the biggest players in the market and review the market periodically to see if any additional investments could be made to improve your diversification. Look at EV-only car makers, battery makers, infrastructure providers, etc. to get a decent balance of stocks. I would not put any more than 10% of your entire investment portfolio into any one stock, and not more than 20% or so in this sector. |
As director, can I invoice my self-owned company? | Sure you can. Obviously it means your company will make less profit, saving you 20% corporation tax, while your personal income will be higher, meaning you will likely spend more than 20% in income tax and National Insurance contributions. |
Should I invest $35,000 for 3-5 months? [duplicate] | Yes, and there are several ways, the safest is a high-yield savings account which will return about 1% yearly, so $35 per month. That's not extremely much, but better than nothing (you probably get almost zero interest on a regular checking account). |
Why would you not want to rollover a previous employer's 401(k) when changing jobs? | I've changed jobs several times and I chose to rollover my 401k from the previous employer into an IRA instead of the new employer's 401k plan. The biggest reason not to rollover the 401k into the new employer's 401k plan was due to the limited investments offered by 401k plans. I found it better to roll the 401k into an IRA where I can invest in any stock or fund. |
How do you measure the value of gold? | We measure the value of gold by comparing it to other things. Sorry, but there is no better answer than that. There is no gold standard (pun intended) by which objects can be measured in value because "value" is a subjective term. It would be comparable to asking how funny is an object. Different objects are funny to different people. Even if we gathered all the really "funny" object together, there is no guaranty those objects would be funny next year - unless we all agreed they were as part of a social contract. Which is basically what we do with currency. While gold does not need a social contract in order for it to retain its value, this is only because it is has been (1) very useful and (2) rare. If either of these two factors change, the value of gold will change - which it has on several occasions. WARRING: Rant about "Intrinsic Value" of gold below. Gold has no "intrinsic" value. None whatsoever. "Intrinsic value" makes just as much sense as a "cat dog" animal. "Dog" and "cat" are referring to two mutually exclusive animals, therefore a "cat dog" is a nonsensical term. Intrinsic Value: "The actual value of a company or an asset based on an underlying perception of its true value ..." Intrinsic value is perceived, which means it is worth whatever you, or a group of people, think it is. Intrinsic value has nothing, I repeat, absolutely nothing, to do with reality. The most obvious example of this is the purchase of a copy-right. You are assigning an intrinsic value to a copy-right by purchasing it. However, when you purchase a copy-right you are not buying ink on a page, you are purchasing an idea. Someone's imaginings that, for all intensive purposes, doesn't even exist in reality! By definition, things that do not exist do not have "intrinsic" properties - because things that don't exist, don't have any natural properties at all. "Intrinsic" according to Websters Dictionary: "Belonging to the essential nature or constitution of a thing ... (the intrinsic brightness of a star)." An intrinsic property of an object is something we know that exists because it is a natural property of that object. Suns emit light, we know this because we can measure the light coming from it. It is not subjective. "Intrinsic Value" by definition is the OPPOSITE of "Intrinsic" |
What is a mutual fund “high water mark” and how does it affect performance fees? | With the caveat that you should always read the fine print... Generally, the high water mark is the absolute highest mark at end of any quarter (sometimes month) over all the quarters (months) in the past. Intra-quarter marks don't matter. So, in your example the mark at the end of the second quarter would only be the new HWM if that mark is higher then the mark at the end of every previous quarter. Again, what happened in the middle of of the second quarter doesn't matter. For hedge funds, the HWM may only be be from the date you started investing rather than over the whole history of the fund, but I would be surprised if that was true for any mutual funds. Though, as I may have mentioned, it is worth reading the fine print. |
What are the tax benefits of dividends vs selling stock | The benefit is not in taxes. When you sell a portion of your stock, you no longer have a portion of your stock. When you get a dividend, you still have a portion of your stock. Dividends are distributed from the net profits of a company and as such usually don't affect its growth/earning potential much (although there may be cases when they do). So while the price takes a temporary dip due to the distribution, you're likely to get the same dividends again next year, if the company continues being similarly profitable. If you sell a portion of your stock, at some point you'll end up with no more stocks to sell. |
Pay off entire mortgage or put into investments | At the moment the interest rate... implies a variable rate mortgage. I believe rates are only going to go up from here. So, if I were in your position, I would pay off the mortgage first. If you don't have 3-6 months in savings for an emergency, I would invest that much money in low risk investments. Anything remaining I would invest in a balanced portfolio of mutual funds. The biggest benefit to this is the flexibility it gives you. Not being burdened by a monthly mortgage frees you up to invest. This may be in your stock portfolio each month or it may be in your community or charitable causes. You have financial margin. |
Frustrated Landlord | You are not a landlord. You have choices: The current situation is charity. And that's ok, so long as you acknowledge it. In the big picture, anything less than market rent is a gift that you are giving the person living in your house. A good tenant might keep the place in better shape, and deserve a lower rent, but that's a quid pro quo. In the end, landlording is a business. If you had 10-20 apartments, they would be proving an income to you and you would have a large chunk of your wealth tied up in it. You would keep the apartments in good shape both to be legal and not a slumlord, but you'd also collect market rent. $100/apt would be $1000-$2000/mo income to you and your family. You wife is right. As always. You have a decision to make to stop the bleeding. |
Ways to trade the Euro debt crisis | Short the Pound and other English financial items. Because the English economy is tied to the EU, it will be hit as well. You might prefer this over Euro denominated investments, since it's not exactly clear who your counterpart is if the Euro really crashes hard. Meaning suppose you have a short position Euro's versus dollars, but the clearing house is taken down by the crash. |
Are Forex traders forced to use leverage? | I recommended Currency Trading For Dummies, in my answer to Layman's guide to getting started with Forex (foreign exchange trading)? The nature of the contract size points toward only putting up a fraction of the value. The Euro FX contract size is 125,000 Euro. If you wish to send the broker US$125K+ to trade this contract, go ahead. Most people trade it with a few thousand dollars. |
Ways to invest my saved money in Germany in a halal way? | You can invest in a couple of Sharia-conform ETFs which are available in Germany and issued by Deutsche Bank (and other financial institutions). For instance, have a look at these ETFs: DB Sharia ETFs In addition, Kuveyt Turk Bank aims to become Germany's first Islamic bank offering Sharia conform investments (Reuters). |
Hedging against an acquisition of a stock | Firstly, going short on a stock and worrying if the price suddenly gaps up a lot due to good news is the same as being long on a stock and worrying that the price will suddenly collapse due to bad news. Secondly, an out of the money call option would be cheaper than an in the money call option, in fact the further out of the money the cheaper the premium will be, all other things being equal. So a good risk management strategy would be to set your stop orders as per your trading plan and if you wish to have added protection in case of a large gap is to buy a far out of the money call option. The premium should not be too expensive. Something you should also consider is the time until expiry for the option, if your time frame for trading is days to weeks you make consider a cheaper option that expires in about a month, but if you are planning on holding the position for more than a month you might need a longer expiry period on the option, which will increase the premium. Another option to consider, if your broker offers it, is to use a guaranteed stop loss order. You will pay a little premium for this type of order and not all brokers offer it, but if it is offered you will be protected against any price gaps past your guaranteed stop loss price. |
Saving up for an expensive car | This seems really simple to me. |
W2 vs 1099 Employee status | In general that's illegal. If you're a W2 employee, you don't miraculously become a 1099 contractor just because they pay you more. If your job doesn't change - then your status doesn't change just because they give you a raise. They can be sued (by you, and by the IRS) for that. Other issues have already been raised by other respondents, just wanted to point out this legal perspective. |
Should I file taxes or Incorperate a personal project? | Normally, incorporation is for liability reasons. Just file your taxes as a business. This just means adding a T2125 to your personal return. There's no registering, that's for GST if over a certain threshold. There's even a section in the instructions for internet businesses. http://www.cra-arc.gc.ca/E/pub/tg/t4002/t4002-e.html#internet_business_activities This is the form you have to fill out. Take note that there is a place to include costs from using your own home as well. Those specific expenses can't be used to create or increase a loss from your business, but a regular business loss can be deducted from your employment income. http://www.cra-arc.gc.ca/E/pbg/tf/t2125/t2125-15e.pdf |
Are social media accounts (e.g. YouTube, Twitter, Instagram, etc.) considered assets? | Assets with zero value, perhaps. Unless you can prove that they have resale value. Good luck with that. In other words, not worth spending time on. |
Why do shareholders participate in shorting stocks? | Short sellers have to pay interest on the borrowings to the shareholders. Although many times brokers don't pass on these earnings to the shareholders, this is the exchange. |
Transfer from credit to debit | As other answers and comments suggest you are trying to do something... odd to say the least. No one wants to use a credit card to finance a checking/current account because you are creating a debt on that credit card (unless you are in the odd situation where the card is in credit) that will immediately start accruing interest at a rate probably in excess of 10% per annum. That is not a clever thing to do. What you really need to do is find an account that one of you owns that has a positive balance and use an internet banking service to transfer part of that positive balance onto the debit card. The other solution is not to use the debit card at all but use the credit card to complete the purchases you are trying to manage with the debit card. The reason that BofA and AmEx customer support can't help you is that no one would ever do what you want to do; they would either move existing money from another account or ask for a bank loan. |
Is there an advantage to keeping a liquid emergency fund if one also has an untapped line of credit? | An emergency fund is your money, sitting in a bank, that you can use for emergency purposes. A line of credit is somebody else's money, that they've provisionally promised to let you borrow. But they can change their mind at any time. |
While working overseas my retirement has not gone into a retirement account. Is it going to kill me on the FAFSA? | Are the schools going to count all my retirement I've saved over the last 20 years as assets and calculate my EFC on 5.x% of that?! Yes. |
Is there a dollar amount that, when adding Massachusetts Sales Tax, precisely equals $200? | Don't worry about it. The State doesn't care about rounding error. All you need to do is say "We charge our prices with tax included" - you know, like carnivals and movie theaters. Then follow the procedures your state specifies for computing reportable tax. Quite likely it wants your pre-tax sales total for the reporting period. To get that, total up your gross sales that you collected, and divide by (1 + tax rate). Just like DJClayworth says, except do it on total sales instead of per-item. If you need to do the split per-transaction for Quickbooks or something, that's annoying. What Quickbooks says will be pennies off the method I describe above. The state don't care as long as it's just pennies, or in their favor. |
Is it normal for brokers to ask whether I am a beginner? | Brokers need to assess your level of competency to ensure that they don't allow you to "bite off more than you can chew" and find yourself in a bad situation. Some brokers ask you to rate your skills, others ask you how long you've been trading, it always varies based on broker. I use IB and they gave me a questionairre about a wide range of instruments, my skill level, time spent trading, trades per year, etc. Many brokers will use your self-reported experience to choose what types of instruments you can trade. Some will only allow you to start with stocks and restrict access to forex, options, futures, etc. until you ask for readiness and, for some brokers, even pass a test of knowledge. Options are very commonly restricted so that you can only go long on an option when you own the underlying stock when you are a "newbie" and scale out from there. Many brokers adopt a four-tiered approach for options where only the most skilled traders can write naked options, as seen here. It's important to note that all of this information is self-reported and you are not legally bound to answer honestly in any way. If, for example, you are well aware of the risks of writing naked options and want to try it despite never trading one before, there is nothing stopping you from saying you've traded options for 10 years and be given the privilege by your broker. Of course, they're just looking out for your best interest, but you are by no means forced into the scheme if you do not wish to be. |
What are the advantages of doing accounting on your personal finances? | Everyone should keep track of what they spend. When you see how much you are spending on each category of expense, you can make good decisions about how much your life is improved by something vs. how much you spend on that thing. Everyone makes better decisions when they are informed by accurate information about those decisions. There's no reason why personal finances are different from any other decision you make in life. This remains true whether you make very little or very much. Some people define rich as being able to live on less money than you earn. |
S-Corp partnership startup. How to pay owners with minimal profit? | If you're really interested in the long-term success of your business, and you can get by in your personal finances without taking anything from the business for the time being, then don't. There is no "legal requirement" to pay yourself a prevailing wage if doing so would put the company out of business. it is common for a company's principals not to draw wages from the business until it is viable enough to sustain payroll. I was in that situation when I first began my business, so the notion that somehow I'm violating a law by being fiscally responsible for my own company is nonsense. Be wise with your new business. You didn't state why you feel the need to take some kind of payment out, but this can be a crucial mistake if it imperils your business or if that money could be better spent on marketing or some other areas which improve revenues. You can always create a salary deferral agreement between yourself and your own company which basically states that the company owes you wages but you are, for the time being, willing to defer accepting them until such time that the company has sufficient revenues to pay you. That's one solution, but the simplest answer is, if you don't need the money you're thinking of paying yourself, don't do it. Let that money work for you in the business so that it pays off better in the long run. Good luck! |
(How) can I print my own checks on my printer on regular paper? | There are certain standards that modern checks need to meet. These aren't required by law, but banks today generally insist on them. If you are able to meet these standards and print your own checks at home, you are allowed to do so. One way this is commonly done is with purchased check blanks and check printing software. Office supply stores sell check blanks that fit into standard computer printers. This check paper includes the necessary security features of checks, and using the check printing software, you can print your personal information, including your name & address, your bank's name and address, and your account numbers. The account numbers on the bottom of the checks are called the MICR code, which stands for Magnetic Ink Character Recognition. Normally, these numbers were printed with special magnetic ink, which was used in automated check reading machines. Checks that you purchase from your bank still use magnetic ink; however, modern check readers are optical, and don't require magnetic ink. So you should be able to print checks with your printer using standard ink/toner, and not have a problem. Without purpose-specific check printing software, you could still buy blank check paper from the store, and with a little trial-and-error you could print using Excel. The biggest challenge with doing this would be printing the MICR code: you would probably need to install an MICR font on your computer and play around with the size and location until you get it where you want it. Doing a little Googling, I see that there are some check printing Excel templates out there, but I haven't tried any of these, and it is unclear to me whether they actually print the MICR, or whether they assume that you have blank checks with the MICR account number and check numbers already printed. Without purchasing blank check paper, you won't have any of the security features, such as microprinting, watermarks, erasure protection, anti-photocopying background, etc. As you mentioned, if you are depositing checks via mobile phone app, as some banks now allow, none of these security features are doing any good. The problem, however, is that you are not writing checks for yourself; you are writing checks to other people, and you have no way of knowing whether or not their banks are going to give them trouble with your checks. There is enough check fraud out there that lots of bank tellers are very cautious. I recommend sticking with check paper that has the security features because, if nothing else, it will make your check look more like a real check. |
Paid cash for a car, but dealer wants to change price | If the discount is only for financed car then their software application should have accepted the payment (electronic transfer ID) from financed bank. In this case the bank should have given the payment on behalf of your son. I believe the dealer know in advance about the paper work and deal they were doing with your son. Financing a car is a big process between dealer and bank. |
How does a 2 year treasury note work? | There is a large market where notes/bills/bonds are traded, so yes you can sell them later. However, if interest rates go up, the value of any bond that you want to sell goes down, because you now have to compete with what someone can get on a new issue, so you need to 'discount' the principal value of your bond in order for someone to want to buy it instead of a new bond that has a higher interest rate. The reverse applies if interest rates fall (although it's hard to get much lower than they are now). So someone wanting to make money in bonds due to interest rate changes, generally wants to buy at higher interest rates, and then sell their bonds after rates have gone down. See my answer in this question for more detail Why does interest rate go up when bond price goes down? To answer 'is that good' the answer depends on perspective: |
Price movement behaviour before earnings announcements | In principle, the stock price should see no change in the days leading up to an earnings announcement, and then at the moment of the announcement, the stock price should move in the direction of the earnings surprise (relative to the market's belief of what earnings were going to be). In practice, stock prices tend to drift a little in the direction of the surprise shortly before the announcement and the associated price jump. This could be because smart investors were able to replicate the computations to predict the announcement or because information gets illegally leaked ahead of the announcement. So I guess your bullet point B is a likely scenario. Note that hedging activity in the options market will not affect stock price one way or another. Options transfer risk from one party to another but net to zero. Intense hedging activity may be able to push up the price of options (increasing the implied volatility), but it shouldn't affect the price of a stock one way or the other. For this reason, bullet point A is not the case. Note that price behavior after the announcement is also interesting: it seems to take some time to reach the correct price instead of jumping directly to it as economists would predict. This phenomenon is known as post earnings announcement drift. |
What is the best way to stay risk neutral when buying a house with a mortgage? | To avoid risk from rising interest rates, get a fixed rate mortgage. For the life of the mortgage your principal and interest payments will remain the same. Keep in mind that the taxes and insurance portion of your monthly payment may still go up. Because you own the property, the costs to maintain the property are your responsibility. If you rented this would be the responsibility of the owner of the property; if the cost to repair and maintain goes up so does the rent. Because you are the owner your annual costs to repair and maintain may go up over time. The way to eliminate risk of loss of value is to never move, until the mortgage is paid off. You will know exactly what principal and interest will cost you over the life of the loan. When you sell that will be essentially return on your payments. You don't know if the loss of value is due to world, national, regional, local or individual circumstances. so hedging is tough. If the fact that the mortgage is 95% is what makes you nervous, your biggest risk is risk of being upside down. That risk is greatly reduced by increasing the amount of the down payment. That decreases the risk that the value will be below the mortgage amount if due to unforeseen circumstances you have to sell immediately. The money will still be lost due to decrease in value, but you aren't forced to bring cash to the settlement table if you need to sell. |
Why does selling and then rebuying stock not lead to free money? | You are misunderstanding what makes the price of a stock go up and down. Every time you sell a share of a stock, there is someone else that buys the stock. So it is not accurate to say that stock prices go down when large amounts of the stock are sold, and up when large amounts of the stock are bought. Every day, the amount of shares of a stock that are bought and sold are equal to each other, because in order to sell a share of stock, someone has to buy it. Let me try to explain what actually happens to the price of a stock when you want to sell it. Let's say that a particular stock is listed on the ticker at $100 a share currently. All this means is that the last transaction that took place was for $100; someone sold their share to a buyer for $100. Now let's say that you have a share of the stock you'd like to sell. You are hoping to get $100 for your share. There are 2 other people that also have a share that they want to sell. However, there is only 1 person that wants to buy a share of stock, and he only wants to pay $99 for a share. If none of you wants to sell lower than $100, then no shares get sold. But if one of you agrees to sell at $99, then the sale takes place. The ticker value of the stock is now $99 instead of $100. Now let's say that there are 3 new people that have decided they want to buy a share of the stock. They'd like to buy at $99, but you and the other person left with a share want to sell at $100. Either one of the sellers will come down to $99 or one of the buyers will go up to $100. This process will continue until everyone that wants to sell a share has sold, and everyone who wants to buy a share has bought. In general, though, when there are more people that want to sell than buy, the price goes down, and when there are more people that want to buy than sell, the price goes up. To answer your question, if your selling of the stock had caused the price to go down, it means that you would have gotten less money for your stock than if it had not gone down. Likewise, if your buying the stock had caused it to go up, it just means that it would have cost you more to buy the stock. It is just as likely that you would lose money doing this, rather than gain money. |
Will I, as a CS student, be allowed to take loans for paying the fees of Ivy Leagues? | I would be surprised if a bank cared about an undergraduate major. Usually, such things are only important if it is a professional degree, like a law degree or medical degree. The big issue is that if you are not a US citizen, a US bank would be unlikely to make an unsecured loan because you could just return to your country and renege on the loan and they would have no way to collect. Therefore, a bank in your own country might be more logical. If you get accepted by a top Ivy school, they all have financial policies that will allow you to attend regardless of how rich or poor you are, so if you are applying to a top school (Harvard, Princeton, MIT, Stanford, Yale) and get accepted, they will fully finance your attendance. The only exception is if (A) they find out you lied about something, or (B) your parents/family are wealthy and they refuse to pay anything. As long as neither of these two things is true, all of the schools listed GUARANTEE they will provide sufficient financial aid. Princeton even has a no-loan policy, which means not only will they fund your attendance, they will do so without you having to take on any loans. |
How can I figure out how much to bid on a parking space? | Scenario 1: Assume that you plan to keep the parking space for the rest of your life and collect the income from the rental. You say these spaces rent for $250 per month and there are fees of $1400 per year. Are there any other costs? Like would you be responsible for the cost of repaving at some point? But assuming that's covered in the $1400, the net profit is 250 x 12 - 1400 = $1600 per year. So now the question becomes, what other things could you invest your money in, and what sort of returns do those give? If, say, you have investments in the stock market that are generating a 10% annual return and you expect that rate of return to continue indefinitely, than if you pay a price that gives you a return of less than 10%, i.e. if you pay more than $16,000, then you would be better off to put the money in the stock market. That is, you should calculate the fair price "backwards": What return on investment is acceptable, and then what price would I have to pay to get that ROI? Oh, you should also consider what the "occupancy rate" on such parking spaces is. Is there enough demand that you can realistically expect to have it rented out 100% of the time? When one renter leaves, how long does it take to find another? And do you have any information on how often renters fail to pay the rent? I own a house that I rent out and I had two tenants in a row who failed to pay the rent, and the legal process to get them evicted takes months. I don't know what it takes to "evict" someone from a parking space. Scenario 2: You expect to collect rent on this space for some period of time, and then someday sell it. In that case, there's an additional piece of information you need: How much can you expect to get for this property when you sell it? This is almost surely highly speculative. But you could certainly look at past pricing trends. If you see that the value of a parking space in your area has been going up by, whatever, say 4% per year for the past 20 years, it's reasonable to plan on the assumption that this trend will continue. If it's been up and down and all over the place, you could be taking a real gamble. If you pay $30,000 for it today and when the time comes to sell the best you can get is $15,000, that's not so good. But if there is some reasonable consistent average rate of growth in value, you can add this to the expected rents. Like if you can expect it to grow in value by $1000 per year, then the return on your investment is the $1600 in rent plus $1000 in capital growth equals $2600. Then again do an ROI calculation based on potential returns from other investments. |
Diversification reduces risk, but does this base on the assumption that expected return of each asset is always in proportion to its risk? | If you have 100% of your money in one security that is inherently more risky than splitting your money 50/50 between two securities, regardless of the purported riskiness of the two securities. The calculations people use to justify their particular breed of diversification may carry some assumptions related risk/reward calculations. But these particular justifications don't change the fact that spreading your money across different assets protects your money from value variances of the individual assets. Splitting your $100 between Apple and Microsoft stock is probably less valuable (less well diversified) than splitting your money between Apple and Whole Foods stock but either way you're carrying less risk than putting all $100 in to Apple stock regardless of the assumed rates of return for any of these companies stock specifically. Edit: I'm sure the downvotes are because I didn't make a big deal about correlation and measuring correlation and standard deviations of returns and detailed portfolio theory. Measuring efficacy and justifying your particular allocations (that generally uses data from the past to project the future) is all well and good. Fact of the matter is, if you have 100% of your money in stock that's more stock risk than 25% in cash, 25% in bonds and 50% in stock would be because now you're in different asset classes. You can measure to your hearts delight the effects of splitting your money between different specific companies, or different industries, or different market capitalizations, or different countries or different fund managers or different whatever-metrics and doing any of those things will reduce your exposure to those specific allocations. It may be worth pointing out that currently the hot recommendation is a plain vanilla market tracking S&P 500 index fund (that just buys some of each of the 500 largest US companies without any consideration given to risk correlation) over standard deviation calculating actively managed funds. If you ask me that speaks volumes of the true efficacy of hyper analyzing the purported correlations of various securities. |
First concrete steps for retirement planning when one partner is resistant | I'd try to (gently) point out to your husband that what he thinks he wants to do now and what he might want to do in 20 or 30 years are not necessarily the same thing. When I was 40 I was thinking that I would work until I died. Now I'm 58 and have health problems and I'm counting down the days until I can retire. Even if your husband is absolutely certain that he will not change his mind about retiring in the next 20+ years, maybe something will happen that puts things beyond his control. Like medical problems, or simply getting too old to be able to work. Is he sure that he will be able to continue to put in 40 hour weeks when he's 80? 90? 100? Just because you put money away for retirement doesn't mean that you are required to retire. If you put money away, and when the time comes you don't want to retire, great! Now you can collect the profits on your investments in addition to collecting your salary and live very well. Or have a nice nest egg to leave to your children. Putting money away for retirement gives you options. Retirement doesn't necessarily mean sitting around the house doing nothing until you waste away and die of boredom. My parents were busier after they retired then when they were working. They spent a lot of time on charity work, visiting people in the hospital, working with their church, that sort of thing. Some people start businesses. As they have retirement income coming in, they don't have to worry about the business earning enough to provide a living, so they can do something they want to do because they think it's fun or contributes to society or whatever. Etc. |
Shares; are they really only for the rich/investors? | As a matter of fact, I invest small sums in stable stocks every month (in fact, much lesser than the $50 you are talking about). More than the return on investment, I gained a lot of knowledge keeping track of my stocks and this now helps me pick my stocks better. And the portfolio is doing great too. So, it is a good idea to start small and invest regularly. |
Buying a more expensive house as a tax shelter (larger interest deduction)? | Depending on the state you live in paying interest on a mortgage opens up other tax deduction options: Real estate taxes, Car tax, donations. See schedule A http://www.irs.gov/pub/irs-pdf/f1040sa.pdf The shocking bottom line is that it never works to your advantage in the short term. Owning your house: But there are big risks, ask anybody stuck with a house they can't sell. But it doesn't scale. You spend 10K more to save 2.5K in taxes. Buy because you want to, not to reduce taxes. |
Stock spread: wide vs. narrow? | The point is that the bid and ask prices dictate what you can buy and sell at (at market, at least), and the difference between the two, or spread, contributes implicitly to your gains or losses. For example, say your $1 stock actually had a bid of $0.90 and an ask of $1.10; i.e. say that $1 was the last price. You would have to buy the stock at the ask price of $1.10, but now you can only sell that stock at the bid price of $0.90. Thus, you would need to make at least that $0.20 spread before you can make a profit. |
AVS Address Verification System of BOTH Credit and Debit Cards - WHERE, HOW? | Parts of what you want are possible, but taken as a whole, you're out of luck. First of all, there is no master database of every cardholder in the country. The only way to check if information is correct is to ask the issuing bank. The AVS system is a way to automate doing so, but it's possible to call the bank directly and verbally verify the address. That means you're subject to the whims of what the issuing bank chooses to support. Banks that are part of the Visa and MasterCard networks generally only verify the numeric parts (address, apartment number, zipcode). AmEx can also verify the cardholder name. But if the bank doesn't have support for validating something, you can't validate it. Separately, there is a "verify-only" transaction which some processors support, which will do exactly what you want: Return AVS values without ever charging the card. However, processors require you to have the "approved merchant account" you don't want to have to have. Without being a merchant, you shouldn't have access to other people's credit cards anyway. Would you really want anyone in the country to be able to verify anyone else's address whenever they want? In short, whatever purpose you have for wanting this probably falls into one of three categories: |
When to trade in a relatively new car for maximum value | I don't disagree with the current answers, but I feel like no one really answered your question directly. Seems to me like what you were asking is when to trade in your car in relation to when/whether your loan is paid off? Assuming you are committed to trading your car in (and not selling it privately as has been suggested), whether the car is paid off should have no impact on what you get for a trade-in. The car is worth what it's worth, and what you owe on it should not affect the transaction. |
No-line-of-credit debit card? | Having worked at a financial institution, this is a somewhat simple, two-part solution. 1) The lendor/vendor/financial institution simply turns off the overdraft protection in all its forms. If no funds are available at a pin-presented transaction, the payment is simply declined. No fee, no overdraft, no mess. 2) This sticking point for a recurring transaction, is that merchants such as Netflix, Gold's Gym etc, CHOOSE to allow payments like this, BECAUSE they are assured they are going to get paid by the financial institution. It prevents them from having issues. Only a gift card will not cost you more money than you put in, BUT I know of several institutions, that too many non-payment periods can cause them to cease doing business with you in the future. TL:DR/IMO If you don't want to pay more than you have, gift cards are the way to go. You can re-charge them whenever you choose, and should you run into a problem, simply buy a new card and start over. |
Effect of Job Change on In-Progress Mortgage Application | Best advice is to ask your lender. That being said, if you are changing jobs, but keeping the same type of job you are usually ok and if the loan was approved before, it would still be approved. If you switch from W-2 to 1099 or vice-versa, permanent to contract, switch industries (software dev to accountant), or make less money there is a strong risk of the loan being declined. |
Are stock index fund likely to keep being a reliable long-term investment option? | Stock index funds are likely, but not certainly, to be a good long-term investment. In countries other than the USA, there have been 30+ year periods where stocks either underperformed compared to bonds, or even lost value in absolute terms. This suggests that it may be an overgeneralization to assume that they always do well in the long term. Furthermore, it may suggest that they are persistently overvalued for the risk, and perhaps due for a long-term correction. (If everybody assumes they're safe, the equity risk premium is likely to be eaten up.) Putting all of your money into them would, for most people, be taking an unnecessary risk. You should cover some other asset classes too. If stocks do very well, a portfolio with some allocation to more stable assets will still do fairly well. If they crash, a portfolio with less risky assets will have a better chance of being at least adequate. |
How do currency markets work? What factors are behind why currencies go up or down? | Q: How do currency markets work? A: The FX (foreign exchange) market works very much like the stock market where potential buying parties bid $Y of country 1's currency to buy $1 in country 2's currency. Potential selling parties sell (ask) $1 of country 2's currency for $Y of country 1's currency. Like the stock market, there are also a swaps, futures and options in this market. Q: What factors are behind why currencies go up or down? A: Just like any open market, currencies go up and down based on supply and demand. Many factors affect the supply and demand of a particular currency. Some were listed well by the other posts. Q: What roles do governments, central banks, institutions, and traders have in the process? A: It's common practice that gov'ts intervene to "control" the value of currencies. For example, although it's not general public knowledge, the Canadian gov't is actively purchasing up US dollars in the FX market in an effort to stop the US/Canadian exchange rate from dropping further. This has dramatic economic consequences for the Canadian ecomony if the Canadian dollar were to strengthen too far and too quickly. |
Withholding for unexpected Short-Term Capital Gains and Penalties | The safe harbor provision is based on the tax you or the prior year. So in 2016 this helped you as your tax was substantially increased from 2015. However, by the same token in 2017 your safe harbor amount is going to be very high. Therefore if 2017 is similar you will owe penalties. The solution here is to make estimated tax payments in the quarters that you realize large gains. This is exactly what the estimated tax payments are for. Your estimate tax payments do not have to be the same. In fact if you have a sudden boost in earnings in quarter 3, then the IRS expects that quarter 3 estimated tax payment to be boosted. |
Where can I open a Bank Account in Canadian dollars in the US? | Give Harris Bank a call; they might be able to help you As of August 21, 2015, Harris bank does NOT offer Canadian dollar accounts in the U.S. |
Is inflation a good or bad thing? Why do governments want some inflation? | Basically, in any financial system that features fractional reserve banking, the monetary supply expands during times of prosperity. Stable, low inflation of 2-4% keeps capital available while keeping the value of money stable. It also discourages hoarding of wealth. Banks aren't vaults. They take deposits and make an explicit promise to repay the depositor on demand. Since most depositors don't need to withdraw money regularly, the lend out the money you deposited and maintain a reserve sufficient to meet daily cash needs. When times are good, banks lend to people and businesses who need capital, who in turn do things that add value to the overall economy. When times are bad, people and businesses either cannot get capital or pay more for it, which reduces the number of times that money changes hands and has a negative impact on the wider economy. People who are trying to sell you commodities or who have a naive view of how the economy actually works decry the current monetary system and throw around scary words like "fiat currency" and "inflation is theft". What these people don't realize is that before the present system, where the value of money is based on promises to repay, the gold and silver backed systems also experienced inflation. With gold/silver based money, inflation was driven by discoveries of gold and silver deposits |
How can online trading platforms be trustworthly? | In most countries trading platforms are legally required to be overseen by a regulator, in the US this is the SEC (Securities and Exchanges Commission). This regulatory oversight is required in order to operate (i.e. have clients) in that country and the company will lose the right to operate in that country if they do not comply with the regulations. If you believe that you have genuine cause to complain that a trading platform that you are using within your jurisdiction is behaving unfairly towards you you can report this to the regulator and they will investigate so long as you can provide them with some concrete evidence. Note that in many jurisdictions gambling websites are also regulated (they are in the UK for example) and so arguments about their fairness are specious. A big problem with a lot of these complaints is that people who lose money are very vocal about blaming everyone else, people who make money are very vocal about their own amazing skills... think about that! |
How can I calculate interest portion of income when selling a stock? | Their interest expense was $17M. Where you see $5.14/sh in Key Statistics, any daily interest received is more than canceled out by the expense paid at the same time. I understand your concern, but this company is not "sitting on cash" as are Apple, Google, etc. Short term rates are well below 1%, 1yr tbill looks like about .2%. So strictly speaking, each share might have 1 cent interest you need to concern yourself with. Disclaimer to other readers - This has nothing to do with taxes. OP is asking about a specific part of the company cash flow. His worst case is $1 per 100 shares. |
Does Joel Greenblatt's “Magic Formula Investing” really beat the market? | In addition to other answers consider the following idea. That guy could have invented say one thousand formulas many years ago and been watching how they all perform then select the one that happened to be beat the market. |
Work on the side for my wife's company | In the US, you'd run the risk of being accused of fraud if this weren't set up properly. It would only be proper if your wife could show that she were involved, acting as your agent, bookkeeper, etc. Even so, to suggest that your time is billed at one rate but you are only paid a tiny fraction of that is still a high risk alert. I believe the expression "if it quacks like a duck..." is pretty universal. If not, I'll edit in a clarification. note -I know OP is in UK, but I imagine tax collection is pretty similar in this regard. |
What is the opposite of a hedge? | The opposite of a hedge is nothing. Because if you don't want to hedge you bets, you don't, therefore you merely have the original bet. The opposite state of being hedged, is being unhedged. |
Should I take out a loan vs pay off with mother's help? | Is it a gift or a loan? Either way, ask the same lawyer who will do the closing to record a mortgage on the property, your mother holds it. You are required to pay her market interest, 4% or so should pass IRS scrutiny. If it's truly a loan, decide on the payoff time and calculate the payments, she'll have a bit of interest income which will be taxable to her, and you might have a write-off if you itemize, which is unlikely. If it's a gift, since you mentioned gift concerns, she can forgive the interest, and principal each year to total $13K, or file the popular Form 709 to declare the whole gift against her $1M unified lifetime gift exclusion (which negates the whole mortgage/lien thing) |
I'm upside down on my car loan and need a different car, what can I do? | I am new to the site and hope I can help! We just purchased a used car a few weeks ago and used dealer's finance again so that's not the issue here. I want to focus on what you can do to resolve your issue and not focus on the mistakes that were made. 1 - DO NOT PURCHASE A NEW CAR! Toyota Camrys are great cars that will last forever. I live in Rochester, NY and all you need is snow tires for the winter as ChrisInEdmonton suggested. This will make a world of difference. Also, when you get a car wash get an under-spray treatment for salt and rust (warm climate cars don't usually come with this treatment). 2 - Focus on paying this loan off. Pay extra to the monthly note, put any bonuses you get to the note. Take lunches to work to save money so you can pay extra. I'm not sure if you put any money down but your monthly note should be around $300? I would try putting $400+ down each month until it is paid off. Anything you can do. But, do not buy a new car until this one is fully paid off! Let me know if this helps! Thanks! |
$700 guaranteed to not be touched for 15 years+, should I put it anywhere other than a savings account? | (Since you used the dollar sign without any qualification, I assume you're in the United States and talking about US dollars.) You have a few options here. I won't make a specific recommendation, but will present some options and hopefully useful information. Here's the short story: To buy individual stocks, you need to go through a broker. These brokers charge a fee for every transaction, usually in the neighborhood of $7. Since you probably won't want to just buy and hold a single stock for 15 years, the fees are probably unreasonable for you. If you want the educational experience of picking stocks and managing a portfolio, I suggest not using real money. Most mutual funds have minimum investments on the order of a few thousand dollars. If you shop around, there are mutual funds that may work for you. In general, look for a fund that: An example of a fund that meets these requirements is SWPPX from Charles Schwabb, which tracks the S&P 500. Buy the product directly from the mutual fund company: if you go through a broker or financial manager they'll try to rip you off. The main advantage of such a mutual fund is that it will probably make your daughter significantly more money over the next 15 years than the safer options. The tradeoff is that you have to be prepared to accept the volatility of the stock market and the possibility that your daughter might lose money. Your daughter can buy savings bonds through the US Treasury's TreasuryDirect website. There are two relevant varieties: You and your daughter seem to be the intended customers of these products: they are available in low denominations and they guarantee a rate for up to 30 years. The Series I bonds are the only product I know of that's guaranteed to keep pace with inflation until redeemed at an unknown time many years in the future. It is probably not a big concern for your daughter in these amounts, but the interest on these bonds is exempt from state taxes in all cases, and is exempt from Federal taxes if you use them for education expenses. The main weakness of these bonds is probably that they're too safe. You can get better returns by taking some risk, and some risk is probably acceptable in your situation. Savings accounts, including so-called "money market accounts" from banks are a possibility. They are very convenient, but you might have to shop around for one that: I don't have any particular insight into whether these are likely to outperform or be outperformed by treasury bonds. Remember, however, that the interest rates are not guaranteed over the long run, and that money lost to inflation is significant over 15 years. Certificates of deposit are what a bank wants you to do in your situation: you hand your money to the bank, and they guarantee a rate for some number of months or years. You pay a penalty if you want the money sooner. The longest terms I've typically seen are 5 years, but there may be longer terms available if you shop around. You can probably get better rates on CDs than you can through a savings account. The rates are not guaranteed in the long run, since the terms won't last 15 years and you'll have to get new CDs as your old ones mature. Again, I don't have any particular insight on whether these are likely to keep up with inflation or how performance will compare to treasury bonds. Watch out for the same things that affect savings accounts, in particular fees and reduced rates for balances of your size. |
Are there good investment options to pay off student loans? | What you're getting at is the same as investing with leverage. Usually this comes in the form in a margin account, which an investor uses to borrow money at a low interest rate, invest the money, and (hopefully!) beat the interest rate. is this approach unwise? That completely depends on how your investments perform and how high your loan's interest rate is. The higher your loan's interest rate, the more risky your investments will have to be in order to beat the interest rate. If you can get a return which beats the interest rates of your loan then congratulations! You have come out ahead and made a profit. If you can keep it up you should make the minimum payment on your loan to maximize the amount of capital you can invest. If not, then it would be better to just use your extra cash to pay down the loan. [are] there really are investments (aside from stocks and such) that I can try to use to my advantage? With interest rates as low as they are right now (at least in the US) you'll probably be hard-pressed to find a savings account or CD that will return a higher interest rate than your loan's. If you're nervous about the risk associated with investing in stocks and bonds (as is healthy!), then know that they come in a wide spectrum of risk. It's up to you to evaluate how much risk you're willing to take on to achieve a higher return. |
What do these options trading terms mean? | Can anyone explain what each of them mean and how they're different from each other? When you "buy to open", you are purchasing an option and opening a new position. When you "sell to open", you are creating a brand new options contract and selling it. "Covered" means that you have assets in your account to satisfy the terms of the options contract. A "covered call" is a call option for which you own shares of the underlying stock that you will sell to the buyer at the option's strike price if he exercises the option. If you previously made a "sell to open" trade to create a new position, and you want to close the position, you can buy back the option. If you previously made a "buy to open" trade, you can "sell to close" which will sell back your option and close your position. In summary: |
Is it possible to make money by getting a mortgage? | Imagine a married couple without a mortgage, but live in a house fully paid for. They pay state income taxes, and property tax, and make charitable deductions that together total $12,599. That is $1 below the standard deduction for 2015, therefore they don't itemize. Now they decide to get a mortgage: $100,000 for 30 years at 4%. That first year they pay about $4,000 in interest. Now it makes sense to itemize. That $4,000 in interest plus their other deductions means that if they are in the 25% bracket they cut their tax bill by $1,000. These numbers will decrease each year. If they have a use for that pile of cash: such as a new roof, or a 100% sure investment that is guaranteed make more money for them then they are losing in interest it makes sense. But spending $4,000 to save $1,000 doesn't. Using the pile of cash to pay off the new mortgage means that the bank is collecting $4,000 a year so you can send $1,000 less to Uncle Sam. |
I have a horrible 401k plan, with high expenses. Should I stay with it or move my money elsewhere? | As to the rollover question. Only rollover to a ROTH if you have other funds you can use to pay the taxes you will be hit with if you do that. DO NOT pay the taxes out of the funds in the 401k. If you don't have a way to pay the taxes, then roll it to a traditional IRA. You never want to pay the government any taxes 'early' and you don't want to reduce the balance. beyond that, A lot depends on how long you figure you will be with that company. If it's only a few years, or if you and other employees can make enough of a fuss that they move the fund to someplace decent (any of the big no-load companies such as Vanguard would be a better custodian), then I'd go ahead and max it out. If you figure to be there for a long while, and it looks like someone is in bed with the custodian and there's no way it will be changed, then maybe look to max out a Roth IRA instead. |
What is inflation? | When we speak about a product or service, we generally refer to its value. Currency, while neither a product or service, has its own value. As the value of currency goes down, the price of products bought by that currency will go up. You could consider the price of a product or service the value of the product multiplied by the value of the currency. For your first example, we compare two cars, one bought in 1990, and one bought in 2015. Each car has the same features (AC, radio, ABS, etc). We can say that, when these products were new, each had the same value. However, we can deduce that since the 1990 car cost $100, and the 2015 car cost $400, that there has been 75% inflation over 25 years. Comparing prices over time helps identify the inflation (or devaluation of currency) that an economy is experiencing. In regards to your second question, you can say that there was 7% inflation over five years (total). Keep in mind that these are absolute cumulative values. It doesn't mean that there was a 7% increase year over year (that would be 35% inflation over five years), but simply that the absolute value of the dollar has changed 7% over those five years. The sum of the percentages over those five years will be less than 7%, because inflation is measured yearly, but the total cumulative change is 7% from the original value. To put that in perspective, say that you have $100 in 2010, with an expected 7% inflation by 2015, which means that your $100 will be worth $93 in 2015. This means that the yearly inflation would be about 1.5% for five years, resulting in a total of 7% inflation over five years. Note that you still have a hundred dollar bill in your pocket that you've saved for five years, but now that money can buy less product. For example, if you say that $100 buys 50 gallons of gasoline ($2/gallon) in 2010, you will only be able to afford 46.5 gallons with that same bill in 2015 ($2.15/gallon). As you can see, the 7% inflation caused a 7% increase in gasoline prices. In other words, if the value of the car remained the same, its actual price would go up, because the value stayed the same. However, it's more likely that the car's value will decrease significantly in those five years (perhaps as much as 50% or more in some cases), but its price would be higher than it would have been without inflation. If the car's value had dropped 50% (so $50 in original year prices), then it would have a higher price (50 value * 1.07 currency ratio = $53.50). Note that even though its value has decreased by half, its price has not decreased by 50%, because it was hoisted up by inflation. For your final question, the purpose of a loan is so that the loaner will make a profit from the transaction. Consider your prior example where there was 7% inflation over five years. That means that a loan for $100 in 2010 would only be worth $93 in 2015. Interest is how loans combat this loss of value (as well as to earn some profit), so if the loaner expects 7% inflation over five years, they'll charge some higher interest (say 8-10%, or even more), so that when you pay them back on time, they'll come out ahead, or they might use more advanced schemes, like adjustable rates, etc. So, interest rates will naturally be lower when forecasted inflation is lower, and higher when forecasted inflation is higher. The best time to get a loan is when interest rates are low-- if you get locked into a high interest loan and inflation stalls, they will make more money off of you (because the currency has more value), while if inflation skyrockets, your loan will be worth less to loaner. However, they're usually really good about predicting inflation, so it would take an incredible amount of inflation to actually come out on top of a loan. |
Auto Insurance: Adding another car to the existing policy (GEICO) | tl;dr: Call them. I'd be very surprised if you have a problem. I used to have have a policy with Geico, and would pay for my car insurance 6 months at a time. About 2 months into my last period, I purchased a house. Unfortunately, Geico didn't offer homeowners insurance in my state, so I ended switching to another company that offered a better auto+home combined policy. Since I had already paid for 6 months of coverage, I figured I'd just be stuck being double-covered for 4 months. So, I didn't bother doing anything until the end of the 6 months and called them to cancel the auto-renewal thinking what I've already paid was a sunk cost. The asked me why I was canceling and I explained the situation and they backdated the cancellation to when I got my policy with the other company and Geico issued me a refund for the time there was overlap. Considering that they did that for a leaving customer, I'd expect them to be able to cancel the policy on a new car of a current paying customer with no issues. |
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